Our Government has Caused Mortgage Rates to Rise Permanently

By
Mortgage and Lending with Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 NMLS ID# 158606

Just last year we had rates in the low threes.  Now we sit with rates in the mid 4's with the 5's just looming over the fence.  Not that any rate below even 7 is bad, but the truth is a lot of it has to do with the economy.  However a lot of it has to do with the cost to manufacture a loan.

Just three years ago we had three people working in our compliance department.  Now, due to the new mortgage rules we have over 50.  The cost of those hires is passed on to the consumer through rates.  All of the new rules are pretty punitive too.  If you make a mistake it can be very costly for a lender.  So what happens is that lenders build in a hedge to deal with those mistakes which again raises rates.

On January 1, 2014, today, January 10th, and on January 18th, three new major rules are introduced to bring even more compliance and more costs for mistakes. 

Guess what....the cost of every new rule gets passed on to the consumer. 

The Consumer Financial Protection Bureau reports to no one.  Just like the Federal Reserve, and as a result has no oversight.  They create rules upon their discretion. 

I'm very excited about 2014.  However, when I talk to consumers, I tell them that the government is making things more expensive for them.  If the government would just prosecute the criminals we wouldn't have new rules for the rule followers to follow.  The criminals will still commit crimes, but more rules just mean more expensive mortgages for consumers.

With all this talk about making things better for the consumer the government just continues to be government and just keeps making things worse...in spite of themselves.

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Rainmaker
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Alexander- Slocum
Premiere Property Group, LLC - Vancouver Washington - Vancouver, WA
Realty Team- Vancouver WA Real Estate

Larry, this is most certainly an ever increasing challenge to our industry.  In times when Reason held sway, regulators would look at the balance between the cost of the new regulation to the consumer/industry/economy vs. the incremental benefit.  From all I've heard, we now have ever increasing negative return with the new regulations vs. benefit. 

Jan 10, 2014 12:02 AM #1
Rainmaker
1,143,971
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

That is 100% accurate! There are so many compliance levels nowadays its truly insane. The worst part is all of this is fed originated and now fed controlled? They let the bubble create and pop and now come in to "save the day" give me a break what a farce

Jan 10, 2014 02:04 PM #2
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Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

Alex.......agreed!

David....Yes...I agree too!!!

Jan 11, 2014 03:20 AM #3
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